The Dreyfus
Third Century
Fund, Inc.
ANNUAL REPORT
May 31, 1999
<PAGE>
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
<PAGE>
Contents
THE FUND
- -------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
7 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
13 Financial Highlights
14 Notes to Financial Statements
18 Report of Independent Auditors
19 Important Tax Information
FOR MORE INFORMATION
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Back Cover
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The Dreyfus
Third Century Fund, Inc. The Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for The Dreyfus Third Century Fund,
Inc. covering the 12-month period from June 1, 1998 through May 31, 1999.
Inside, you'll find valuable information about how the fund was managed during
the reporting period, including a discussion with the fund's portfolio managers,
Paul A. Hilton and Maceo K. Sloan.
Despite the sharp correction that occurred during the third quarter of 1998, the
past year has generally been rewarding for equity investors. Strong economic
growth, low inflation and high levels of consumer spending supported continued
strength in the stocks of many large companies. As a result, several major
market indices have set new records so far in 1999, including the Dow Jones
Industrial Average's first-ever close above the 10,000 level. The broader S&P
500 Index and the technology-laden NASDAQ Index also recorded new highs.
Yet, until near the end of the 12-month period, the stock market's advance
remained relatively narrow, confined to a handful of highly valued growth and
technology stocks. In April, however, some previously out-of-favor market
sectors rallied strongly, including many value-oriented stocks, large-cap
cyclical companies, and many small-cap and midcap stocks.
We appreciate your confidence over the past year, and we look forward to your
continued participation in The Dreyfus Third Century Fund, Inc.
Sincerely,
/s/ Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
June 14, 1999
2
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DISCUSSION OF FUND PERFORMANCE
Paul A. Hilton and Maceo K. Sloan, Portfolio Managers
How did The Dreyfus Third Century Fund, Inc.
perform relative to its benchmark?
For the 12-month period ended May 31, 1999, The Dreyfus Third Century Fund, Inc.
produced a total return of 20.30%.1 The fund's benchmark, the Standard & Poor's
500 Composite Stock Price Index (S&P 500 Index), produced a total return of
21.03% and the Dow Jones Industrial Average produced a total return of 18.65%
for the same period.2
We are pleased with the fund's competitive returns. By investing in
approximately 55-70 large-cap growth names, the fund was able to produce returns
similar to the benchmark's portfolio of 500 names. At the same time, the fund
offers shareholders the opportunity to invest in companies that meet its social
and environmental standards.
What is the fund's investment approach?
The fund focuses on high-quality growth-oriented companies that exhibit three
characteristics: improving profitability measurements; a pattern of consistent
earnings; and reasonable prices. While the majority of our holdings are
large-cap stocks, the fund also has the ability to purchase mid- and small-cap
stocks. Once candidates meet rigorous financial standards, they must also show
evidence that they conduct their business in a manner that contributes to the
enhancement of the quality of life in America.
What other factors influenced the fund's performance?
The portfolio's strongest gains during the period came from its technology,
telecommunications and health care investments. Within the technology sector,
the fund enjoyed solid returns from the same companies that continued to drive
the performance of the S&P 500 Index, includ-
The Fund 3
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DISCUSSION OF FUND PERFORMANCE (continued)
ing Microsoft, Intel, International Business Machines, Cisco Systems,
Lucent Technologies and Sun Microsystems. In addition, telecommunications names
such as MCI WorldCom, AirTouch Communications, AT&T and Ameritech provided
strong returns by expanding their businesses to provide customers with data as
well as voice services.
Health care has long been one of the fund's largest investment themes. Demand
for medical services and products by the aging baby boomers continues to
increase. In addition, recent technological advances have resulted in more
timely FDA approvals and delivery of pharmaceutical products to the marketplace.
Finally, new television and radio advertising has been able to raise consumer
brand awareness, thereby driving revenues of many names in the portfolio, most
notably Johnson & Johnson, Guidant, Schering-Plough and Amgen.
On the other hand, financial stocks hindered performance as many of these
companies have not yet recovered fully from the global credit and currency
crisis that took place last fall. However, we viewed this as an excellent
opportunity to acquire fundamentally sound, attractively priced names for the
portfolio, and to add to existing high-quality names.
What is the fund's current strategy?
Over the past several months, we've begun to add more cyclical names --
companies whose earnings are sensitive to changes in economic conditions -- to
the portfolio because these companies tend to perform best in an improving
economy. Most recently, when the stock market began to shift its emphasis away
from growth companies to more reasonably priced value names, we followed suit.
In doing so, we believe we have been able to align the portfolio more closely
with prevailing market conditions.
Can you give us an update on the fund's
social investment program?
This has been a very busy proxy season for social shareholder resolutions, not
just for companies held in this fund, but for a wide array of
4
<PAGE>
companies in general. In fact, so far in 1999, shareholders have filed
approximately 220 resolutions concerning social and environmental policies
with over 150 major U.S. companies. The most popular resolutions were those
concerning the environment, equal employment opportunity, global corporate
accountability, international health and tobacco, and executive compensation.
While we carefully examine each resolution on a case-by-case basis, in most
cases, we vote the fund's shares in support of social shareholder resolutions
if we believe they support the fund's areas of social concern. At all times, we
strive to maintain open communications with the companies' managements so that
we can encourage improvement in socially responsible areas.
For example, this past year Home Depot faced two resolutions: to release
diversity data on its employment practices and to stop the sale of products made
from old-growth wood. We voted in favor of both of these resolutions and are
currently engaged in an ongoing dialogue with Home Depot's management team
regarding these issues. In response to the resolutions, Home Depot recently
released equal employment opportunity data in its publicly available social
responsibility report. While the company had already banned the sale of
old-growth redwood prior to the resolution, it continues to work together with
the Forest Stewardship Council to identify suitable old-growth alternatives. We
are pleased with Home Depot's responses to these resolutions, however, we
believe the company can still do more. Our view is that Home Depot is a leader
in its industry and we will continue to work with the company to encourage
further improvements.
June 14, 1999
1 Total return includes reinvestment of dividends and any capital gains paid.
Past performance is no guarantee of future results. Share price and investment
return fluctuate such that upon redemption fund shares may be worth more or
less than their original cost.
2 SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index and The Dow Jones
Industrial Average are widely accepted unmanaged indices of U.S. stock market
performance.
The Fund 5
<PAGE>
$331,939
Standard & Poor's 500
Composite Stock Price Index*
$316,522
The Dreyfus Third
Century Fund, Inc.
Comparison of change in value of $10,000 investment in the fund and the Standard
& Poor's 500 Composite Stock Price Index
- --------------------------------------------------------------------------------
Average Annual Total Returns as of 5/31/99
Inception
1 Year 5 Years 10 Years (3/29/72)
- --------------------------------------------------------------------------------
Fund 20.30% 23.62% 16.25% 13.56%
* Source: Lipper Analytical Services, Inc.
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in The Dreyfus Third Century
Fund, Inc. on 3/29/72 (Inception Date) to a $10,000 investment made in the
Standard & Poor's 500 Composite Stock Price Index on that date. For comparative
purposes, the value of the Index on 3/31/72 is used as the beginning value on
3/29/72. All dividends and capital gain distributions are reinvested.
The Dreyfus Third Century Fund primarily seeks capital growth through
investment in common stocks of companies that, in the opinion of the fund's
management, not only meet traditional investment standards, but which also show
evidence that they conduct their business in a manner that contributes to the
enhancement of the quality of life in America. Current income is a secondary
goal. The fund's performance shown in the line graph takes into account all
applicable fees and expenses. The Standard & Poor's 500 Composite Stock Price
Index is a widely accepted, unmanaged index of overall stock market performance
which does not take into account charges, fees and other expenses and is not
subject to the same socially responsible investment criteria as The Dreyfus
Third Century Fund. Further information relating to fund performance, including
expense reimbursements, if applicable, is contained in the Financial Highlights
section of the Prospectus and elsewhere in this report.
6
<PAGE>
STATEMENT OF INVESTMENTS
May 31, 1999
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Common Stocks--95.1% Shares Value ($)
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Commercial Services--.9%
At Home, Cl. A 40,200 a 5,095,350
Interpublic Group Cos. 73,800 5,590,350
10,685,700
Consumer Durables--.6%
Newell Rubbermaid 170,200 6,893,100
Consumer Non-Durables--8.6%
Clorox 216,100 21,812,594
Kimberly-Clark 562,000 32,982,375
PepsiCo 555,800 19,904,588
Procter & Gamble 244,900 22,867,538
97,567,095
Consumer Services--.7%
Infinity Broadcasting, Cl. A 299,000 a 7,643,188
Electronic Technology--19.6%
Cisco Systems 308,550 a 33,593,381
EMC 131,000 a 13,050,875
Global Telesystems Group 87,800 a 6,672,800
Intel 287,000 15,515,938
International Business Machines 351,800 40,918,733
Linear Technology 222,400 11,787,200
Lucent Technologies 426,000 24,228,750
Nokia, A.D.S. 149,400 10,607,400
Solectron 210,000 a 11,497,500
Sun Microsystems 497,600 a 29,731,600
Tellabs 401,800 a 23,505,300
221,109,477
Finance--13.8%
American Express 155,900 18,893,131
American International Group 206,450 23,599,816
BankAmerica 202,217 13,080,912
Citigroup 224,700 14,886,375
Federal National Mortgage Association 533,700 36,291,600
Fifth Third Bancorp 128,700 8,775,731
Marsh & McLennan Cos. 176,600 12,847,650
Merrill Lynch 170,000 14,280,000
State Street 172,100 13,122,625
155,777,840
The Fund 7
<PAGE>
STATEMENT OF INVESTMENTS (continued)
May 31, 1999
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Common Stocks (continued) Shares Value ($)
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Health Services--2.1%
Cardinal Health 258,450 15,603,919
United Healthcare 150,300 8,754,975
24,358,894
Health Technology--10.2%
Amgen 207,200 a 13,105,400
Guidant 332,000 16,600,000
Johnson & Johnson 192,000 17,784,000
Lilly (Eli) 221,700 15,837,694
Merck & Co. 454,000 30,645,000
Schering-Plough 250,800 11,301,675
Watson Pharmaceuticals 270,000 a 10,344,375
115,618,144
Non-Energy Minerals--1.1%
Alcoa 220,000 12,100,000
Process Industries--1.4%
Avery Dennison 120,300 7,202,963
Ecolab 198,000 8,415,000
15,617,963
Producer Manufacturing--9.3%
Emerson Electric 237,000 15,138,375
Illinois Tool Works 278,100 21,344,175
Minnesota Mining & Manufacturing 252,600 21,660,450
Pitney Bowes 207,400 13,221,750
Tyco International 207,000 18,086,625
Xerox 275,800 15,496,513
104,947,888
Retail Trade--9.5%
CVS 324,000 14,904,000
Home Depot 307,500 17,489,063
Kroger 173,500 a 10,160,594
Safeway 510,600 a 23,742,900
Sears, Roebuck & Co. 306,400 14,649,750
TJX Cos. 360,000 10,800,000
Wal-Mart Stores 353,600 15,072,200
106,818,507
8
<PAGE>
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Common Stocks (continued) Shares Value ($)
- --------------------------------------------------------------------------------
Technology Services--8.1%
America Online 71,200 a 8,499,500
BMC Software 406,800 a 20,111,175
Microsoft 464,600 a 37,487,413
Oracle 1,011,600 a 25,100,325
91,198,413
Utilities--9.2%
AES 320,100 a 15,924,975
AT&T 330,750 18,356,625
AT&T - Liberty Media Group, Cl.A 195,000 a 12,955,313
AirTouch Communications 203,100 a 20,411,550
Ameritech 191,900 12,629,419
MCI WorldCom 275,897 a 23,830,603
104,108,485
Total Common Stocks
(cost $776,036,430) 1,074,444,694
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Principal
Short-Term Investments--3.8% Amount ($) Value ($)
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Certificates of Deposit--.0%
Self Help Credit Union,
4.66%, 6/21/1999 100,000 100,000
U.S. Treasury Bills--3.8%
4.38%, 7/22/1999 428,000 425,161
4.47%, 8/5/1999 4,751,000 4,713,040
4.44%, 8/12/1999 525,000 520,122
4.48%, 8/19/1999 36,222,000 35,849,058
4.48%, 8/26/1999 1,545,000 1,527,735
43,035,116
Total Short-Term Investments
(cost $43,152,772) 43,135,116
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Total Investments (cost $819,189,202) 98.9% 1,117,579,810
Cash and Receivables (Net) 1.1% 12,610,143
Net Assets 100.0% 1,130,189,953
a Non-income producing.
See notes to financial statements.
The Fund 9
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STATEMENT OF ASSETS AND LIABILITIES
May 31, 1999
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Cost Value
- --------------------------------------------------------------------------------
Assets ($):
Investments in securities--See Statement
of Investments 819,189,202 1,117,579,810
Cash 12,957,434
Dividends and interest receivable 544,432
Receivable for shares of Common Stock subscribed 198,140
Prepaid expenses 52,350
1,131,332,166
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Liabilities ($):
Due to The Dreyfus Corporation and affiliates 889,498
Payable for shares of Common Stock redeemed 37,759
Accrued expenses 214,956
1,142,213
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Net Assets ($) 1,130,189,953
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Composition of Net Assets ($):
Paid-in capital 729,791,296
Accumulated undistributed investment income--net 85,006
Accumulated net realized gain (loss) on investments 101,923,043
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 298,390,608
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Net Assets ($) 1,130,189,953
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Shares Outstanding
(150 million shares of $.331/3 par value Common Stock authorized) 88,854,980
Net Asset Value, offering and redemption price per share ($) 12.72
See notes to financial statements.
10
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STATEMENT OF OPERATIONS
Year Ended May 31, 1999
- --------------------------------------------------------------------------------
Investment Income ($) Investment Income ($):
- --------------------------------------------------------------------------------
Income:
Cash dividends (net of $24,186 foreign taxes withheld at source) 7,226,016
Interest 1,321,401
Total Income 8,547,417
Expenses:
Investment advisory fee--Note 3(a) 7,521,525
Shareholder servicing costs--Note 3(b) 1,671,176
Professional fees 107,832
Registration fees 80,664
Custodian fees--Note 3(b) 79,856
Prospectus and shareholders' reports 56,988
Directors' fees and expenses--Note 3(c) 33,381
Interest expense--Note 2 23,221
Loan commitment fees--Note 2 4,338
Miscellaneous 36,377
Total Expenses 9,615,358
Investment (Loss) (1,067,941)
- --------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments--Note 4 ($):
Net realized gain (loss) on investments 114,693,454
Net unrealized appreciation (depreciation) on investments 66,921,091
Net Realized and Unrealized Gain (Loss) on Investments 181,614,545
Net Increase in Net Assets Resulting From Operations 180,546,604
See notes to financial statements.
The Fund 11
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Year Ended May 31,
-----------------------------
1999 1998
- --------------------------------------------------------------------------------
Operations ($):
Investment income (loss)--net (1,067,941) 527,450
Net realized gain (loss) on investments 114,693,454 127,135,626
Net unrealized appreciation (depreciation)
on investments 66,921,091 61,034,848
Net Increase (Decrease) in Net Assets
Resulting from Operations 180,546,604 188,697,924
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Dividends to Shareholders from ($):
Investment income--net -- (1,359,845)
Net realized gain on investments (105,500,411) (61,193,006)
Total Dividends (105,500,411) (62,552,851)
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Capital Stock Transactions ($):
Net proceeds from shares sold 731,491,242 1,080,725,202
Dividends reinvested 100,555,806 60,535,061
Cost of shares redeemed (688,590,998) (1,032,801,808)
Increase (Decrease) in Net Assets from
Capital Stock Transactions 143,456,050 108,458,455
Total Increase (Decrease) in Net Assets 218,502,243 234,603,528
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Net Assets ($):
Beginning of Period 911,687,710 677,084,182
End of Period 1,130,189,953 911,687,710
Undistributed investment income--net 85,006 85,006
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Capital Share Transactions (Shares):
Shares sold 59,336,041 97,261,223
Shares issued for dividends reinvested 8,565,231 5,636,412
Shares redeemed (56,431,517) (93,123,816)
Net Increase (Decrease) in Shares Outstanding 11,469,755 9,773,819
See notes to financial statements.
12
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FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
<CAPTION>
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Year Ended May 31,
-------------------------------------------------------
1999 1998 1997 1996 1995
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<S> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning
of period 11.78 10.01 9.25 7.45 7.80
Investment Operations:
Investment income (loss)--net (.01) .01 .02 .03 .07
Net realized and unrealized
gain (loss) on investments 2.29 2.68 2.16 2.39 .65
Total from Investment
Operations 2.28 2.69 2.18 2.42 .72
Distributions:
Dividends from investment
income--net -- (.02) (.02) (.05) (.07)
Dividends from net realized
gain on investments (1.34) (.90) (1.40) (.57) (1.00)
Total Distributions (1.34) (.92) (1.42) (.62) (1.07)
Net asset value, end of period 12.72 11.78 10.01 9.25 7.45
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Total Investment Return (%) 20.30 27.76 25.70 33.63 11.81
- ----------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to
average net assets .96 .97 1.03 1.11 1.12
Ratio of net investment income
(loss) to average net assets (.11) .07 .22 .36 .93
Portfolio Turnover Rate 75.88 70.41 66.52 92.08 133.54
- ----------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 1,130,190 911,688 677,084 473,452 368,833
</TABLE>
See notes to financial statements.
The Fund 13
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
The Dreyfus Third Century Fund, Inc. (the "fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified
open-end management investment company. The fund's investment objective is to
provide capital growth. The Dreyfus Corporation ("Dreyfus") serves as the
fund's investment adviser. Dreyfus is a direct subsidiary of Mellon Bank,
N.A. ("Mellon"). NCM Capital Management Group, Inc. ("NCM") serves as the
fund's sub-investment adviser. Premier Mutual Fund Services, Inc. is the
distributor of the fund's shares which are sold to the public without a sales
charge.
The fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities are valued at the last sales
price on the securities exchange on which such securities are primarily traded
or at the last sales price on the national securities market. Securities not
listed on an exchange or the national securities market, or securities for which
there were no transactions, are valued at the average of the most recent bid and
asked prices. Bid price is used when no asked price is available. Securities for
which there are no such valuations are valued at fair value as determined in
good faith under the direction of the Board of Directors.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the fund received net
earnings credits of $5,977 during the period ended May 31, 1999 based on
available cash bal-
14
<PAGE>
ances left on deposit. Income earned under this arrangement is included in
interest income.
(c) Dividends to shareholders: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain are normally declared and paid annually, but the fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the fund not to distribute such gain.
(d) Federal income taxes: It is the policy of the fund to continue to qualify as
a regulated investment company, if such qualification is in the best interests
of its shareholders, by complying with the applicable provisions of the Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
During the period ended May 31, 1999, the fund reclassed $1,067,941 to
accumulated undistributed net investment income from accumulated net realized
gain on investments as a result of permanent book to tax differences. The
results of operations and net assets were not affected by this reclassification.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility (the "Facility") primarily to be utilized for
temporary or emergency purposes, including the financing of redemptions. In
connection therewith, the fund has agreed to pay commitment fees on its pro rata
portion of the Facility. Interest is charged to the fund at rates based on
prevailing market rates in effect at the time of borrowings.
The average daily amount of borrowings outstanding during the period ended May
31, 1999, was approximately $430,800 with a related weighted average annualized
interest rate of 5.39%.
The Fund 15
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 3--Investment Advisory Fee, Sub-Investment Advisory
Fee and Other Transactions With Affiliates:
(a) Pursuant to the investment advisory ("Agreement") with Dreyfus, the
investment advisory fee is computed at an annual rate of .75 of 1% of the value
of the fund's average daily net assets and is payable monthly. The Agreement
provides that if in any full fiscal year the aggregate expenses of the fund,
exclusive of taxes, brokerage, interest on borrowings, commitment fees and
extraordinary expenses, exceed 11/2% of the value of the fund's average daily
net assets, the fund may deduct from the fees paid to Dreyfus, or Dreyfus will
bear such excess expense. There was no expense reimbursement pursuant to the
agrement during the period ended May 31, 1999.
Pursuant to a Sub-Investment Advisory Agreement with NCM, the sub-investment
advisory fees are payable monthly by Dreyfus, and are based upon the value of
the fund's average daily net assets, computed at the following annual rates:
Average Net Assets
------------------
0 to $400 million................. .10 of 1%
$400 million to $500 million...... .15 of 1%
$500 million to $750 million...... .20 of 1%
In excess of $750 million......... .25 of 1%
(b) Under the Shareholder Services Plan, the fund reimburses Dreyfus Service
Corporation, a wholly-owned subsidiary of Dreyfus, an amount not to exceed an
annual rate of .25 of 1% of the value of the fund's average daily net assets for
certain allocated expenses of providing personal services and/or maintaining
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. During the period ended May
31, 1999, the fund was charged $1,084,748 pursuant to the Shareholder Services
Plan.
16
<PAGE>
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended May 31, 1999, the fund was charged $300,526 pursuant to the transfer
agency agreement.
The fund compensates Mellon under a custody agreement for providing custodial
services for the fund. During the period ended May 31, 1999, the fund was
charged $79,856 pursuant to the custody agreement.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the fund an annual fee of $10,000. The Chairman of the Board
receives an additional 25% of such compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended May 31, 1999, amounted to
$742,587,945 and $739,731,715, respectively.
At May 31, 1999, accumulated net unrealized appreciation on investments was
$298,390,608, consisting of $311,970,444 gross unrealized appreciation and
$13,579,836 gross unrealized depreciation.
At May 31, 1999, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Fund 17
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
The Dreyfus Third Century Fund, Inc.
We have audited the accompanying statement of assets and liabilities of The
Dreyfus Third Century Fund, Inc., including the statement of investments, as of
May 31, 1999, and the related statement of operations for the year then ended,
the statement of changes in net assets for each of the two years in the period
then ended, and financial highlights for each of the years indicated therein.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included verification by
examination of securities held as of May 31, 1999 and confirmation of securities
not held by the custodian by correspondence with others. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Dreyfus Third Century Fund, Inc. at May 31, 1999, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the financial highlights for each of the indicated
years, in conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
New York, New York
July 2, 1999
18
<PAGE>
IMPORTANT TAX INFORMATION (Unaudited)
For Federal tax purposes the fund hereby designates $1.124 per share as a
long-term capital gain distribution of the $1.339 per share paid on December 7,
1998.
The fund also designates 25.191% of the ordinary dividends paid during the
fiscal year ended May 31, 1999 as qualifying for the corporate dividends
received deduction. Shareholders will receive notification in January 2000 of
the percentage applicable to the preparation of their 1999 income tax returns.
The Fund 19
<PAGE>
NOTES
<PAGE>
<PAGE>
For More Information
The Dreyfus
Third Century Fund, Inc.
200 Park Avenue
New York, NY 10166
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Sub-Investment Adviser
NCM Capital Management Group, Inc.
103 West Main Street
Durham, North Carolina 27705
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
By telephone
Call 1-800-645-6561
By mail Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
By E-mail Send your request to [email protected]
On the Internet Information can be viewed online or downloaded from:
http://www.dreyfus.com
Printed on recycled paper.
50% post-consumer.
Process chlorine free.
Vegetable-based ink.
(c) 1999, Dreyfus Service Corporation 035AR995
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN THE DREYFUS THIRD CENTURY FUND, INC. AND THE STANDARD
& POOR'S 500 COMPOSITE STOCK PRICE INDEX
EXHIBIT A:
STANDARD
& POOR'S 500 THE DREYFUS
PERIOD COMPOSITE STOCK THIRD CENTURY
PRICE INDEX * FUND, INC.
3/29/72 10,000 10,000
5/31/72 10,266 10,061
5/31/73 10,124 8,177
5/31/74 8,721 7,551
5/31/75 9,556 9,193
5/31/76 10,928 10,781
5/31/77 10,937 12,082
5/31/78 11,656 14,870
5/31/79 12,522 17,335
5/31/80 14,858 24,830
5/31/81 18,603 33,866
5/31/82 16,607 26,088
5/31/83 25,378 37,009
5/31/84 24,604 33,576
5/31/85 32,415 43,715
5/31/86 43,971 52,949
5/31/87 53,275 60,640
5/31/88 49,807 58,265
5/31/89 63,136 70,235
5/31/90 73,604 82,355
5/31/91 82,259 96,514
5/31/92 90,345 100,299
5/31/93 100,816 110,350
5/31/94 105,101 109,657
5/31/95 126,288 122,610
5/31/96 162,168 163,843
5/31/97 209,909 205,945
5/31/98 274,257 263,121
5/31/99 331,939 316,522
* Source: Lipper Analytical Services, Inc.
